United States

Customer development

Customers

At March 31, 2024, the United States operating segment (T‑Mobile US) had 120.9 million customers, compared to 119.7 million customers at December 31, 2023. Net customer additions were 1.2 million in the first quarter of 2024, compared to 1.3 million in the first quarter of 2023 due to the factors described below.

Postpaid net customer additions were 1.2 million in the first quarter of 2024, compared to 1.3 million in the first quarter of 2023. Postpaid net customer additions decreased primarily from lower postpaid other net customer additions, primarily due to lower net additions from High Speed Internet and wearables. The lower net additions from High Speed Internet was primarily driven by increased deactivations from a growing customer base and lower gross additions driven by sunsetting of promotional pricing in order to maximize long-term value creation, partially offset by a lower churn rate. This decrease was partially offset by higher net additions from other connected devices. High Speed Internet net customer additions included in postpaid other net customer additions were 346 thousand and 445 thousand in the first quarter of 2024 and 2023, respectively.

Prepaid net customer losses were 48 thousand in the first quarter of 2024, compared to additions of 26 thousand in the first quarter of 2023. The losses were primarily due to lower gross additions driven by continued moderation of prepaid industry growth and lower net additions from High Speed Internet. High Speed Internet net customer additions included in prepaid net customer losses and additions were 59 thousand and 78 thousand in the first quarter of 2024 and 2023, respectively.

Development of operations

Revenue, service revenue

Total revenue for the United States operating segment of EUR 18.0 billion in the first quarter of 2024 decreased by 1.4 %, compared to EUR 18.3 billion in the first quarter of 2023. In U.S. dollars, T‑Mobile US’ total revenue decreased by 0.2 % during the same period. Total revenue was relatively flat primarily due to lower equipment revenues, offset by higher service revenues. The components of these changes are described below.

Service revenues increased in the first quarter of 2024 by 2.4 % to EUR 14.8 billion. In U.S. dollars, T‑Mobile US’ service revenues increased by 3.6 % during the same period. This increase resulted from higher postpaid revenues, primarily due to higher average postpaid accounts and higher postpaid Average Revenue per Account (ARPA). This increase was partially offset by lower wholesale and other service revenues, primarily from lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023, lower Affordable Connectivity Program and Lifeline revenues, and lower MVNO revenues. The decrease in MVNO revenues was primarily due to DISH servicing more of its Boost customers with their standalone network and the migration by Verizon of legacy TracFone customers off of the T‑Mobile US network, partially offset by growth in other MVNO partners.

Equipment revenues decreased in the first quarter of 2024 primarily from a decrease in the number of postpaid and prepaid devices sold, including lower upgrades. This decrease was partially offset by slightly higher average revenue per device sold, primarily driven by a shift in the high-end phone mix, mostly offset by an increase in promotions per postpaid device. In addition, equipment revenues decreased due to a decrease in lease revenues, primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to equipment installment plans (EIP). The decrease in equipment revenues was partially offset by an increase in liquidation revenue, primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing.

Other revenues decreased in the first quarter of 2024 primarily from the transition of certain device recovery programs from external sources to in-house processing, resulting in a change in presentation to equipment revenues.

Adjusted EBITDA AL, EBITDA AL

In euros, adjusted EBITDA AL increased by 6.1 % to EUR 6.9 billion in the first quarter of 2024, compared to EUR 6.5 billion in the first quarter of 2023. The adjusted EBITDA AL margin increased to 38.5 % in the first quarter of 2024, compared to 35.8 % in the first quarter of 2023. In U.S. dollars, adjusted EBITDA AL increased 7.3 % during the same period. Adjusted EBITDA AL increased primarily due to higher service revenues as discussed above, lower costs due to the sale of the Wireline Business on May 1, 2023, lower employee costs primarily due to reduced headcount, and higher Sprint Merger-related synergies, as well as lower equipment costs as a result of lower number of postpaid and prepaid devices sold, including lower upgrades. The increase in adjusted EBITDA AL was partially offset by lower equipment revenues and lower other revenues as described above and higher average cost per device sold, primarily driven by a shift in the high-end phone mix and an increase in liquidation costs, primarily due to a higher number of in-house liquidated devices, including from the transition of certain device recovery programs from external sources to in-house processing. In U.S. dollars, lease revenues decreased as a result of the continued strategic shift in device financing from leasing to EIP by 76.0 % in the first quarter of 2024.

In euros, adjusted core EBITDA AL increased by 7.8 % to EUR 6.9 billion in the first quarter of 2024, compared to EUR 6.4 billion in the first quarter of 2023. In U.S. dollars, adjusted core EBITDA AL increased by 9.1 % during the same period. The change was primarily due to the fluctuation in adjusted EBITDA AL as discussed above, excluding the change in lease revenues.

EBITDA AL in the first quarter of 2024 included special factors of EUR ‑0.1 billion compared to EUR ‑0.4 billion in the first quarter of 2023. The change in special factors was primarily due to lower Sprint Merger-related costs. The change in special factors is also impacted by other special items including certain severance, restructuring, and other expenses and income, not directly attributable to the Sprint Merger which are not reflective of T‑Mobile US’ core business activities recognized in the first quarter of 2023. Overall, EBITDA AL increased by 10.2 % to EUR 6.8 billion in the first quarter of 2024, compared to EUR 6.2 billion in the first quarter of 2023, primarily due to the factors described above, including special factors.

Profit/loss from operations (EBIT)

EBIT increased to EUR 4.0 billion in the first quarter of 2024, compared to EUR 3.6 billion in the first quarter of 2023. In U.S. dollars, EBIT increased by 14.0 % during the same period primarily due to higher EBITDA AL, partially offset by slightly higher depreciation, amortization and impairment losses. In U.S. dollars, depreciation, amortization and impairment losses increased by 2.0 % primarily due to higher depreciation expense from the acceleration of certain technology assets as T‑Mobile US continues to modernize its network, technology systems, and platforms.

Cash capex (before spectrum investment), cash capex

Cash capex (before spectrum investment) decreased by 13.5 % to EUR 2.4 billion in the first quarter of 2024, compared to EUR 2.8 billion in the first quarter of 2023. In U.S. dollars, cash capex (before spectrum investment) decreased by 12.5 % due to a decrease in purchases of property and equipment, primarily due to increased capital efficiencies from accelerated investments in the T‑Mobile US nationwide 5G network in previous years.

Cash capex decreased by 13.5 % to EUR 2.5 billion in the first quarter of 2024, compared to EUR 2.9 billion in the first quarter of 2023. In U.S. dollars, cash capex decreased by 12.5 % primarily due to lower purchases of property and equipment as discussed above.